We start from the crowdestate name connected directly with the term crowdfunding. The term crowdfunding is the union of “crowd” and “financing”. So, it is a matter of collective funding or better a collaboration between people who want to bring their value in the support of ideas and projects.
In short, those businesses that have not yet taken off in the start-up phase. If crowdfunding growth is a fact, there are many economists who claim that in 2025, the volume of business generated by collective loans can be considered a quota of 300 billion dollars.
To give a major boost to the crowdfunding phenomenon will be the real estate crowdfunding, a business model with innovative and revolutionary features, which is experiencing a positive phase, mainly due to the recovery of the real estate sector.
Crowdestate: what is?
An example is worth a thousand words to explain the process. Suppose the user has a certain amount of money available and at the same time intends to actively contribute to realizing a real estate project.
If until a few years ago, banks, funds and various institutional investors managed the thing in an almost monopolistic way, thanks obviously to their immense resources, today with real estate crowdfunding, anyone can take part in the project, investing a minimum share.
How much is? At just €50. The merit is all of the technology that breaks down every barrier. In Europe? From perfect unknown until a few years ago, today beside Crowdestate, there are some movement in the field of real estate crowdfunding: Walliance and Housers are two themed portals that are attracting the attention of professionals and fans of collective financing.
Let’s see now what are the distinctive features of Crowdestate.
It is a crowd funding platform based in Estonia (Europe) and the founders of this startup wanted to focus primarily on the Estonian real estate market, which is in sharp growth but also real estate transactions in other European countries.
Crowdestate takes care of selecting all those highly profitable real estate projects, proposing the planimetry, the business plan, the documentation, the report and the history of the bidding company, as well as an accurate summary of the situation, including the historian of the bidding company.
Invest in real estate crowdfunding
The investment process varies from platform to platform. However, in Crowdestate there are some steps to take before investing practically in the platform.
1) Registration: registration of the account in the platform. Enter your details to proceed with registration.
2) Account opening: the platform is guided and prepares the association for a virtual and digital wallet with which to pay money.
3) Payment of funds: the easiest way to transfer funds is by bank transfer. Recharging your digital wallet in this way will be a breeze.
4) Where to invest: you choose which is the best opportunity for you. Degree of risk, duration and return are all aspects of crucial importance to consider in the investment phase.
Is it possible to proceed with the exchange of company shares? The answer is no. However, transfer of credit between two parties is admissible.
Real estate crowdfunding performance
The cornerstone of real estate crowdfunding is focused on the type of platform. At the present state of things, there are two types of platform.
1) Lending crowdfunding: the return depends on the amount of the interest rate, established by the person delegated to raise funds. These interests may derive either as a result of the income deriving from the rent of the building or not. But what matters is the loan and not the derivation of interests. The request to obtain an extra return linked to the sale of the property is an accepted option.
2) Equity crowdfunding: in this case it is the company that commits to investing with the intention of giving the start to building an house (for example). To put it briefly, the return depends on the subtraction of the sale price of the property minus the capital invested.
From Crowdestate website: You can earn money from real estate investments either though regular rental income or real estate appreciation. Different types of real estate investment have different return expectations, depending on both rental income as well as underlying real estate appreciation. Commercial real estate might have a net yield of 6 – 9%, while residential real estate might have a net yield of 3 – 4% annually. Real estate developments have much higher return expectations, but so are the accompanying risks. Real estate prices are hard to predict, but real estate values have historically high correlation with inflation and wage growth. You will find Crowdestate’s financial models and return expectations attached to all our investment opportunities. At the same time, those models reflect Crowdestate’s views and they can not be treated as promises or guarantees. All investment decisions made by Crowdestate’s members should be based on personal views and preferences.
When it comes to investments in real estate crowdfunding, avoiding risks and losses is always advisable. In the investment phase, however, it is good to have the humility to be advised by experts in the sector, even if given that the market in progress, estimates and forecasts are in vain.
However, the industrial realities in Europe are increasingly inspired by real estate crowdfunding. The fact that in Europe can claim credit all SMEs and not only those considered innovative is a more democratic decision. Moreover, here, the real estate market is on the rise.
Ok, I think it is worthwhile to invest in real estate crowdfunding, both for the security of the investment and for the speed in the return of capital.